Elderly couple's lives in limbo over unpaid $1.63 tax bill

STAFF PHOTO BY SCOTT THRELKELD
Dolores Atwood visits her husband, Kermit, who has to live with a relative instead of with her in a FEMA trailer, because of health problems.

Bidders hold up their numbers Friday, July 13, 2007, at the St. Tammany Parish Sheriff's annual property tax sale. The Slidell-area home of Kermit and Dolores Atwood was sold at a similar sale in 1997 for $1.63 in deliquent property tax.

In 1996, the St. Tammany Parish Sheriff's Office mailed a paltry $1.63 property tax bill for the Slidell-area home of Kermit and Dolores Atwood that never reached its destination.

The seemingly innocuous, misaddressed bill was the start of a bizarre legal ordeal that threatens to leave the elderly couple homeless and now stands at the door of the state Supreme Court.

The chain of events that followed the wayward property tax bill, including the eventual sale of the home at a sheriff's tax sale, is described by Dolores Atwood as "seven years of emotional hell."

"I don't know how much more I can endure," said Atwood, 69, while sitting in a FEMA trailer in front of her Katrina-ravaged brick home on Dauphine Street, just north of Slidell.

"I wake up in the middle of the night, and it's on my mind," she said. "All this should have never happened."

But it did, all because of the $1.63 tax bill that Atwood and her husband, Kermit, never received. And they still face the threat of losing their property because of the bill, which was mailed to a defunct address in late 1996 and returned undelivered to the Sheriff's Office.

The couple cling to the hope that recent state court decisions, which say their home should never have been put up for a tax sale, withstand further appeals by a land company tenaciously pursuing a lawsuit to obtain the property.

The Atwoods' nightmare began when they learned in 2000 that their four-bedroom, two-bath home had been sold in 1997 through a tax sale for the $1.63 in unpaid taxes, plus 10 cents interest and $125 in costs associated with the sale.

"We found out about it seven days after the three-year redemption period ended," during which delinquent taxpayers can reclaim their property, Atwood said. She then complained to the sheriff's and assessor's offices that she never received the bill and knew nothing about it.

The house, which the couple has owned mortgage-free since 1968, previously was totally state homestead exempt, meaning there was no tax bill, Atwood said. The couple's mailing address during that time changed from a rural route and mailbox number to 4122 Dauphine St. because of the implementation of the parish's 911 emergency phone system. The tax bill mailed to the rural route address was returned as undeliverable to the Sheriff's Office which, after advertisements of delinquent taxes in the parish's legal journal, put the property on the auction block.

"The Sheriff's Office could have easily found us," Atwood said. "We're in the phone book. We didn't go anywhere ... And we never thought about telling the assessor's office about our address change because we've never had to pay property taxes before."

After learning about the couple's plight, Assessor Patricia Schwarz Core got the state Tax Commission to nullify the tax sale because the bill was mailed to a nonexistent address.

"We thought it was over and everything was fine," Atwood said.

But two years later in 2002, when the couple decided to sell the house and got a $90,000 offer, "we learned there was a lien on our property," Atwood said.

It wasn't a lien, but a notice of pending litigation that was attached to the property's listing in courthouse records, Tax Commission attorney Deborah L. Crain said. However, like a lien, "it does cloud the title to the property," Crain said.

The notice was placed on the property by Jamie Land Co., which had bought the property rights from American Land Investments a month after American Land acquired it at the tax sale.

Jamie Land Co. also had sued the Atwoods and the Tax Commission to get the property shortly after the commission annulled the sale.

Atwood said that because the couple didn't have a clear title to their property, they couldn't sell their house in 2002. When Katrina hit, the stormed toppled trees onto the home. "We didn't have insurance," Atwood said. "Since we didn't have clear title, we couldn't qualify for Road Home or a mortgage to fix the house."

The 2,100-square-foot house with a 900-square-foot double garage sits in disrepair surrounded by tall weeds on the lot, which measures 150 feet by 185 feet. Atwood, who said she lives on a $800 monthly Social Security check, stays alone in a FEMA trailer in front of the house. Her husband, 71 and on a respirator, lives with relatives.

"My husband said we aren't spending another dime on it until we know it's definitely ours," she said.

The Atwoods did get help from the Tax Commission, whose staff attorneys are defending the commission's decision to nullify the sale. Core got Slidell lawyer Gary Duplechain to represent the Atwoods.

"I sure hope for her sake that it's all over soon," Core said. "She's gone through hell."

In May 2006, state Judge Patricia Hedges upheld the commission's action to nullify the tax sale and ruled that the title to the property belongs to the Atwoods.

But Jamie Land, headed by James A. Lindsay II of Bush, appealed. Last month, a three-judge panel of the state 1st Circuit Court of Appeal, in a 2-1 decision, upheld Hedges' decision. Jamie Land asked the court to rehear the case, but Monday the court denied the request.

Jamie Land attorney John Davidson said the company plans to ask the state Supreme Court to hear the case. Unfortunately for the Atwoods, it still could be a while before the case is resolved, Crain said.

Lindsay, the company president, said he did not want to pursue a long court case over the property. "I've been trying to settle this from the very beginning," Lindsay said. "I've offered to settle for very little. Every time we meet in court, we beg to settle."

Lindsay said he's made offers, ranging from $2,000 to $5,000, to settle the case and drop the lawsuit. "I've got about $20,000 in this and I would settle right now for $5,000," Lindsay said. He said he doesn't want to see Atwood suffer, but "I have rights too," adding that the commission gave him no notice when it annulled the tax sale.

Atwood said if there were offers to settle, she is totally unaware of them. Besides, why should she settle? Atwood said. The state has nullified the tax sale, and the courts have upheld the action, she said.

"I don't owe him 50 cents, not with what he's put me through," Atwood said. "This should have long been over with."

Lindsay said he sued because the Tax Commission exceeded its authority when it voided the sale.

In the recent appeal court ruling, Judges Robert D. Downing and Jefferson Hughes said it's "uncontradicted" that the Atwoods "did not receive notice of the tax sale due to an incorrect address, even though the correct address was readily ascertainable."

Citing other court decisions, the two judges said "due process requires that the property owner be properly notified before property can be sold for taxes. If notice requirements are not followed, the sale is null and void."

"When a notice is returned unclaimed, the tax official cannot sit back and do nothing, but has a duty to notify the property owner," the judges stated, again citing prior court decisions. "Failure to do so makes the tax sale null and void." And a newspaper notice is "not a reasonable means to send notice," the judges said, and "personal service or mailed notice is constitutionally required if such is reasonably ascertainable."

Jamie Land argued that once the three-year redemption period has expired, the state Constitution allows only the courts to annul a tax sale. Therefore, the commission lacked the authority to void the sale of the Atwoods' property, the company contends.

Judge John T. Pettegrew, in a dissenting opinion, agreed with the company. Pettegrew said the Constitution grants the sole power and authority to the courts to annul a tax sale after the redemption period has expired.